GERMANY – The €2bn professional pension fund for auditors and chartered accountants – the Versorgungswerk der Wirtschaftsprüfer und der vereidigten Buchprüfer (WPV) – has changed its real estate strategy to include direct holdings.

WPV, which has a 14% real estate allocation, has invested solely in indirect real estate vehicles to date, but is now "starting to set up an individual fund with direct holdings", according to managing director Hans-Wilhelm Korfmacher.

"Up until recently, I had been of the opinion that indirect investments into properties were preferable," he said. "But in a pooled fund, you only have limited decision-making powers and you have to accept being tied to a certain manager, sometimes for a decade."

In future, Korfmacher wants to reduce these "limits" on the fund's decisions – "and if there is no other solution, I want to be able to replace a manager".

For this reason, the funds will be organised into a master structure. WPV is currently deciding between a German investment structure and a Luxembourg vehicle as administrator.

"This model will allow us either to purchase properties directly ourselves or use several managers aiming at choosing specialists for various countries and sectors," Korfmacher added.

WPV will continue to invest in pooled real estate funds, "given the advantages of pooled funds", such as liquidity, he said.

However, Korfmacher wants to "check carefully" the alignment of interest with other investors in funds.

"This is an attitude that can now be seen with many medium-sized, as well as large institutional investors, that want more say in investment decisions or a more homogeneous alignment of interest in a fund," he said.

WPV will also make its first investment in the residential sector.

"Yields are lower but stable, and, in the current market environment, we have all become less demanding when it comes to returns," Korfmacher said.

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